5.2 million in states against health reform are left without coverage

About 5.2 million Americans will be left without health coverage after 26 states decided to reject expanded Medicaid insurance programs for the poor with money provided under President Obama’s health care reform.

Alabama, Louisiana, Mississippi and South Carolina will be particularly hard hit as those southern states will fail to provide coverage to at least one-third of uninsured adults, according to a report from the Kaiser Commission on Medicaid and the Uninsured. In Texas, more than 1 million people won’t have access to insurance provided through the Patient Protection and Affordable Care Act of 2010, while 763,890 Floridians won’t receive health coverage.

Expansion of Medicaid eligibility was intended to provide health insurance for the working poor, those with incomes just higher than the poverty line who would struggle to pay premiums. While the Supreme Court last year upheld the law, it also allowed states not to expand Medicaid.

“In states that expand their Medicaid programs, millions of adults will gain Medicaid coverage under the law,” according to the report issued Thursday by the commission affiliated with the Kaiser Family Foundation, a health research nonprofit in Menlo Park, Calif. “However, with many states opting not to implement the Medicaid expansion, millions of adults will remain outside the reach of the ACA and continue to have limited, if any, option for health coverage.”

The issue has created a coverage gap. The law was designed to expand Medicaid for those making as much as 138 percent of the poverty line. Only about 30 percent of poor adults now qualify for the joint federal-state program. Low-income workers who earn more than 138 percent of poverty are eligible for tax credits to help pay for insurance through the health exchanges created under the law.

The federal government will pay all the costs for states that expand Medicaid through 2016 and 90 percent of the extra expense to 2020.

Once the court struck down the mandate to expand Medicaid, poor workers in states that elected not to broaden their programs had nowhere to turn, the commission said in its report. They don’t earn enough to get the tax credits and they aren’t poor enough to qualify for Medicaid under the current eligibility level, which is a median income of about $9,400 a year for a family of three. The ACA would have allowed Medicaid benefits for families of three with incomes of about $27,000 annually.

Workers who fall into the gap are unlikely to be able to afford the cost of buying a health plan on their own. The average premium for a 40-year-old buying insurance through a national exchange is about $224 per month for a bronze plan, roughly half the monthly income for those at the lower end of the range, according to the report.

“People in the coverage gap are likely to face barriers to needed health services or, if they do require medical care, potentially serious financial consequences,” the commission concluded in the report. “Further, the safety net of clinics and hospitals that has traditionally served the uninsured population will continue to be stretched in these states.”

Mississippi leads the nation in the percentage of uninsured adults in the coverage gap with 37 percent, followed by Alabama with 36 percent, Louisiana at 34 percent and South Carolina at 33 percent.

With 1 million uninsured in Texas, the state has the largest number of people without access to health insurance, representing a fifth of U.S. citizens without coverage. Florida has the second highest.